Invest in 457 or other taxable account

[Qwertykid18]

Hello all, TIA

I max out my Roth IRA and am looking for another place to invest. My job offers a 457, and they match .5% of my salary once I put in 10 dollars a paycheck. It looks like my best option in the 457 is vanguard institutional index (VINIX). I’d like to invest in VTSAX but I don’t have that option. Should I just stay in the 457 at my job or do my own investing outside of the Roth in VTSAX?

[maizefolk]

Is it a governmental 457 or a nongovernmental one?

If governmental I'd focus on maxing out the 457 before doing taxable investing. (457s are awesome in that you can withdrawal the money without penalty even without waiting for the 5 years a Roth conversion pipeline takes to kick in.)

If nongovernmental, probably the same, just be aware that your funds would be at risk if your employer ever went belly up.

[grobinski]

Matching money is free money, you would be crazy to leave on the table. ~70% of the holdings of VTSAX make up VINIX. If you really feel you need the breath of VTSAX, you could put a % into a small cap index within or without of the 457.

[facepalm]

I have Vanguard Institutional Index in my 457(b), it is very low cost (0.02, if memory serves), and has been an excellent investment.

The more you can set aside tax free the better.

[DadJokes]

My 457 has VINIX, and it has been great - it has even had a slightly better return than VTSAX over the last 5 years (like only .04% better) with similarly low fees.

The 457 is the best retirement vehicle for early retirement, provided you have a low fee plan.